Business

Venture capital volume towards edtechs reached a new record in 2021, says HolonIQ

Last year, 17 new edtech unicorns emerged, and many of them are targeting Latin America as a key region to grow

Brazil startups investiment
Photo: Shutterstock

A new report by HolonIQ, a market-intelligence firm that monitors the global education industry, shows that the venture capital volume towards edtech startups has reached a new record: $20.8 billion in funding rounds around the globe – the data does not include private equity investments.

Against the backdrop of pandemic-related school closures and mandatory lockdowns around the globe, there’s been an abrupt pivot to remote and hybrid learning. “Once a niche sector with an ambitious vision to transform the way the world learns, edtech venture investment is now 40x larger than it was a little over a decade ago in 2010, nearly 5x the previous investment peak in 2015 and 3x pre-pandemic investment levels in 2019,” says the report.

“The pandemic brought a spotlight for the edtechs industry that helped accelerate technology adoption. This disruption drove the sector to think completely differently about how people around the world learn, bringing investment opportunities for edtech companies in the region,” Thiago Payva, vice president of education at HolonIQ, told LABS.

READ ALSO: Edtech giants are poised for ascension

While China’s investment collapsed due to new regulations that, for example, oblige Chinese companies teaching academic curriculums to go non-profit, the funding volume raised in the US, Europe, and India skyrocketed – India is now the number market for edtechs in Asia. The good news for Latin America is that many edtech unicorns now reaching global markets are targeting the region as a key one to grow.

In 2021, Bangalore-based BYJU, one of India’s most valuable startups, raised a $350 million Series G led by UBS Group and Blackstone, and it was valued at $16.5 billion. Right after the mega-round, the startup landed in Brazil and Mexico, and five other new markets.

READ ALSO: Latin America’s most promising edtechs, according to HolonIQ

Latin American edtech startups have also been experiencing a boom. In the first half of 2021, venture capital firms poured as much as $299 million into over 2,000 education companies in LatAm, and, in September last year, they were on their way to reaching $1 billion in investments since 2010

Recently, Fernando Valenzuela, former edtech executive and founder of the Global Impact EdTech Alliance (GIEA), told LABS that Latin America had been quietly growing into a hub of edtech innovation for almost ten years. “Compared to the global leaders, the Latin American edtech startup space is still fragmented and small, but it is already the fourth-largest market and has grown at an annual rate of 14% since 2013. We now have a very strong ecosystem here with about 150 or so recognized edtechs in the region,” he said in September last year.

2021 saw 17 new education unicorns emerge

According to HolonIQ, 2021 “delivered 17 new edtech unicorns“, which is “more than 3x the number added in any previous year and brings the 2021 year end total to 32”. Also, in the last year, five unicorns “escaped the herd,” making their way to the capital markets via IPO (three US unicorns and two Chinese listed on the NYSE and NASDAQ).

Get the best insights about Latin America market in your inbox